Blockbuster Bankruptcy: Shares fall, do you expect it?

After the news that Blockbuster may have to file for chapter 11 bankruptcy, this has had a huge effect on share prices. Blockbuster shares have fallen by 30 percent, a direct result of a much tougher market, one that Netflix are coping very well with.

Blockbuster has always relied on people going to their stores to hire a DVD or Blu-ray; they then offered a mail service. However, the likes of Netflix with their on-demand streaming could have hammered the final nail in Blockbuster’s coffin.

The company has already gone to shareholders to help with its mounting debt – the recent decline in shares will not go down well though. AP reports that Blockbuster shares closed at 28 cents on Wall Street on Wednesday, we just wait to see if they recover today.

Blockbuster did have more than 7,200 stores worldwide but were forced to shut hundred of them last year. People are looking for different ways to watch movies now and Blockbuster have taken their time catching up to the likes of Netflix and Amazon.

Blockbuster is most definitely going down. Its balance sheet shows "stockholders' deficit" instead of "stockholders' equity" so the shareholders are going to be really mad at CEO James Keyes and the management for throwing their hard-earned money out the window.